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Prominent public policy models have hypothesised that rising income inequality will lead to more redistributive spending. Subsequent theoretical advancements and empirical research often failed to find a positive relationship between inequality and redistributive spending, however. Over the last few decades both income inequality and redistributive spending have been growing in the United States states. In this work, we consider whether temporal variation in inequality can explain variation in redistributive spending, while controlling for a number of factors that covary with redistributive spending in the states. In an analysis of data for 1976–2008, we find that higher levels of inequality are associated with greater redistributive spending, offering empirical evidence that fiscal policy at the state level responds to growing levels of income inequality. Considering the growing role of state governments in welfare provision during the past several decades, this finding is relevant for policy researchers and practitioners at all levels of government.

The mass franchise led to more responsive government and a more equitable distribution of resources in the United States and other democracies. Recently in America, however, voter participation has been low and increasingly biased toward the wealthy. We investigate whether this electoral “class bias” shapes government ideology, the substance of economic policy, and distributional outcomes, thereby shedding light on both the old question of whether who votes matters and the newer question of how politics has contributed to growing income inequality. Because both lower and upper income groups try to use their resources to mobilize their supporters and demobilize their opponents, we argue that variation in class bias in turnout is a good indicator of the balance of power between upper and lower income groups. And because lower income voters favor more liberal governments and economic policies we expect that less class bias will be associated with these outcomes and a more equal income distribution. Our analysis of data from the U.S. states confirms that class bias matters for these outcomes.

Financial activity has become increasingly important in affluent economies in recent decades. Because this ‘financialization’ distributes costs and benefits unevenly across groups, politics and policy likely affect the process. Therefore, this article discusses how changes in the power of organizations representing the ‘winners’ and ‘losers’ of financialization affect its pace. An analysis of the United States from 1949–2005, shows that when unions are stronger, and when the Democratic Party is in power and is more reliant on the support of working-class voters, financialization is slower. In contrast, when the financial industry is more highly mobilized into politics, financialization is faster. The study also finds that financial deregulation was one policy translating the political power of these actors into economic outcomes.

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